Last week, a good friend of mine intimated that since the bailout craze began last year, foreclosures would actually go up, because greedy banks would realize they could make more money by competing to be the most victimized institutions possible (like someone in a fender bender on a bus who magically gets serious whiplash), than they could by continuing to fight for piddling little mortgage payments with homeowners.
Horror stories about banks artificially jacking up interest rates to the point where people who had been paying on time are now losing their homes are starting to come out of the woodwork. Apparently, mortgages are chump change compared to bailout bucks.
And sure enough, my friend’s vindicated. Consider this story from today’s Review-Journal:
Clark County saw 7,747 homes taken by banks during the month, more than double February’s 3,286 foreclosures and four times the 1,937 in March 2008. The first-quarter total of 13,642 is on pace to shatter last year’s record 31,416 foreclosures in Clark County….
Nevada ranks No. 8 in foreclosures nationwide with 26,760 real estate-owned — bank-owned — properties over the past six months….
“Hopefully, this is a short-term surge caused by months of delayed foreclosures,” said Alexis McGee, president of Foreclosures.com. “This is a very troubling turn after seeing some bright spots earlier this year.”
Several banks had agreed to suspend foreclosures while the Obama administration crafted a plan to modify home mortgages for troubled borrowers.
Is this legitimately a temporary result of a “backlog,” or a disturbing beginning of a new trend to compete for the bottom of the barrel in siphoning off taxpayer dollars? We’ll just have to compare these numbers to those half a year down the line.
Behold, the law of unintended consequences. Or, just some sharks smelling blood in the water…